Preparing Financial Statements

The adjusted trial balance of Monona Inc. as of December 31, 2020, follows.

Adjusted Trial Balance
December 31, 2020
Acct. No.	Account	Debit	Credit
100	Cash	$28,800	$
104	Accounts receivable	56,000
105	Allowance for doubtful accounts		2,840
106	Inventory	64,000
108	Prepaid insurance	3,840
150	Land	9,160
155	Building	160,000
156	Equipment	48,000
162	Accumulated depreciation		10,000
202	Accounts payable		60,000
204	Salaries payable		3,600
208	Deferred service revenue		1,600
210	Interest payable		400
240	Note payable		120,000
302	Common stock		148,000
304	Retained earnings		9,600
310	Dividends	4,000
400	Sales revenue		400,000
402	Service revenue		20,000
510	Costs of goods sold	192,000
512	Salaries expense	184,000
520	Repair expense	1,600
526	Insurance expense	2,880
528	Depreciation expense	10,560
540	Interest expense	9,600
542	Bad debt expense	1,600	-
	Totals	$776,040	$776,040

a. Prepare the income statement for the year ended December 31, 2020. b. Prepare the statement of stockholders equity for the year ended December 31, 2020. Assume that the common stock was issued prior to 2020. c. Prepare the balance sheet on December 31, 2020

• Income Statement
• Statement of Stockholders' Equity
• Balance Sheet

a. Prepare the income statement for the year ended December 31, 2020.

Note: Enter revenues and expenses in the order of the largest dollar amount to the smallest dollar amount. Note: Do not use negative signs with any of your answers.

Monona Inc.
Income Statement
For the Year Ended December 31, 2020
Revenues
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income	Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income	Answer
Total revenues		Answer
Expenses
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income	Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income	Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income	Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income	Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income	Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income	Answer
Bad debt expense	Answer
Total expenses		Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income		Answer

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. Prepare the statement of stockholders equity for the year ended December 31, 2020. Assume that the common stock was issued prior to 2020.

Note: Do not use negative signs with any of your answers.

Monona Inc.
Statement of Stockholders' Equity
For the Year Ended December 31, 2020
	Common Stock	Retained Earnings	Total Stockholders' Equity
Balance, January 1, 2020	Answer	Answer	Answer
Issuance of common stock	Answer	Answer	Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income	Answer	Answer	Answer
Less: Dividends	Answer	Answer	Answer
Balance, December 31, 2020	Answer	Answer	Answer

Prepare the balance sheet on December 31, 2020

Note: Do not use negative signs with any of your answers.

Monona Inc.
Balance Sheet
December 31, 2020
Assets
Cash		Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income	Answer
Less: Allowance for doubtful accounts	Answer	Answer
Inventory		Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income		Answer
Land		Answer
Building	Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income	Answer
Less: Accumulated depreciation	Answer	Answer
Total assets		Answer
Liabilities
Accounts payable		Answer
Salaries payable		Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income		Answer
Interest payable		Answer
Notes payable		Answer
Total liabilities		Answer
Stockholders' Equity
Common stock		Answer
AnswerAccounts receivableAllowance for doubtful accountsInventoryPrepaid insuranceLandBuildingEquipmentAccounts payableDeferred service revenueRetained earningsSalesService revenueCost of goods soldDepreciation expenseSalaries expenseInterest expenseInsurance expenseRepair expenseNet income		Answer
Total stockholders' equity		Answer
Total liabilities and stockholders' equity		Answer